LSAP - anyone used it recently?
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LSAP - anyone used it recently?
Buying a house...LSAP would be a great help. Have booklet from the JSHAO, but wouldlike some help re:
£5K tax man not interested £5K+ seen as a 'perk and attracts tax. How much and where is it taken from?
MOD F1745, can it be found on t' tintranet? Have looked, but to no avail.
Help much appreciated.
Huey
£5K tax man not interested £5K+ seen as a 'perk and attracts tax. How much and where is it taken from?
MOD F1745, can it be found on t' tintranet? Have looked, but to no avail.
Help much appreciated.
Huey
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The tax liability is based on the fact that you are not paying a commercial rate of interest on the loan. The tax man will charge your highest rate of tax on the benefit, so if in year 1 you have a loan of £10,000, then the charge will be tax rate x assessed interest rate x £10,000. Say you pay tax at 40% on an assessed rate of 6% on a loan of 10,000 then the tax is £240 pa.
It should be deducted by JPA, but you may have to complete a tax return and enter the benefit on the form.
It should be deducted by JPA, but you may have to complete a tax return and enter the benefit on the form.
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The JSHAO came to our place a few months ago and were pushing VERY hard for people to buy houses. However, they know we can't afford them in many of the places we are based (Marlow anyone?), so were simply pushing the idea of Buy-to-Let - anything -anywhere.
The subject of LSAP came up (though I don't recall any mention of the tax issue), but that allowance is not available to you unless you live in the house. ISTR that even if you plan to live in the house, but are posted away and therefore forced to let (eg moving from Lincoln to High Wycombe) or else sell-up, the LSAP has to be repaid. It is this aspect of this allowance that would cause me concern.
The housing for Service Families is in a mess and with the annual release of 10% of FQs for Anington to sell to civvies (often for way beyond the budgets of Service pers), it won't be too long before they run out. So, in a few years, the MoD will be faced with either buying a load of FQs back, or coughing up even more cash for SSFA, and we know that the MoD can afford neither option!
STH
The subject of LSAP came up (though I don't recall any mention of the tax issue), but that allowance is not available to you unless you live in the house. ISTR that even if you plan to live in the house, but are posted away and therefore forced to let (eg moving from Lincoln to High Wycombe) or else sell-up, the LSAP has to be repaid. It is this aspect of this allowance that would cause me concern.
The housing for Service Families is in a mess and with the annual release of 10% of FQs for Anington to sell to civvies (often for way beyond the budgets of Service pers), it won't be too long before they run out. So, in a few years, the MoD will be faced with either buying a load of FQs back, or coughing up even more cash for SSFA, and we know that the MoD can afford neither option!
STH
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I live in the mess during the week and in my house at weekends. I applied for LSAP end of last year. Very straight forward process, quick and painless. Not read anything about tax liability but do have to pay insurance on the payment of around 1.50 a month.
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LSAP
Huey,
I have LSAP and been collared by the taxman every yr for a tax return. Its good value - below 5K IR are not interested. You will recieve a P11D every year in Apr/May telling you the cash equivalent of the loan - ie the perk value to you. IR will then tax this amount if you are asked to submit a tax return.
To give you an idea in 03/04 the cash equivalent of my LSAP at £5500 was £111. They then tax you on the £111 so even if you pay 40% tax it only costs you £44 for the year. If you ever let yr home you can also claim all LSAP costs apart from the repayment against your income/expenditure. It is one of the last of the old real benefits.
I let my house with full consent from MOD with LSAP - no problem.
I have LSAP and been collared by the taxman every yr for a tax return. Its good value - below 5K IR are not interested. You will recieve a P11D every year in Apr/May telling you the cash equivalent of the loan - ie the perk value to you. IR will then tax this amount if you are asked to submit a tax return.
To give you an idea in 03/04 the cash equivalent of my LSAP at £5500 was £111. They then tax you on the £111 so even if you pay 40% tax it only costs you £44 for the year. If you ever let yr home you can also claim all LSAP costs apart from the repayment against your income/expenditure. It is one of the last of the old real benefits.
I let my house with full consent from MOD with LSAP - no problem.
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I'm currently going through the application process for LSAP and so far so good. However, I think my solicitor maybe about to screw things up with regard to the 2nd legal charge over the property. My solicitor tells me that the 2nd legal charge can't be raised until the property purchase has been completed. However, AFPAA need a signed copy of the legal charge before the advance of pay is released. Catch 22!!
My solicitor has written to AFPAA asking for clarification, but understandably I'm getting a bit nervous about this development, particularly as the property completion date is a month away (estimated).
Has anyone else had this issue regarding the 2nd legal charge and if so, how did it get resolved?
My solicitor has written to AFPAA asking for clarification, but understandably I'm getting a bit nervous about this development, particularly as the property completion date is a month away (estimated).
Has anyone else had this issue regarding the 2nd legal charge and if so, how did it get resolved?
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Had an issue when trying to move the legal charge on to another property.
Despite several letters and a few heated phone calls I struggled to get my mortgage lender to accept the second legal charge on the house.
Fortunately, despite my solicitor being completely ineffectual, the very helpful admin assistant at the (RN) LSAP office managed to sort the problem, somehow.
Just keep the phonecalls going to your admin office, and at the end of the day, if you are struggling with the mortgage lender, there are plenty more our there who are willing to give you money.
Despite several letters and a few heated phone calls I struggled to get my mortgage lender to accept the second legal charge on the house.
Fortunately, despite my solicitor being completely ineffectual, the very helpful admin assistant at the (RN) LSAP office managed to sort the problem, somehow.
Just keep the phonecalls going to your admin office, and at the end of the day, if you are struggling with the mortgage lender, there are plenty more our there who are willing to give you money.
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Hell, Hell, Hell.
My process ran thus:
Day 1: I apply for LSAP. Unit sends paperwork via recorded delivery.
Week 6: Nothing heard. Estate agent getting bothered by lack of information.
Week 7: Still nothing. I phone AFPAA to be told that the paperwork never arrived, despite my Unit having proof of delivery. AFPAA say they'll rush it through if I fax the information to them. Meanwhile, my Sgt has been told he's not eligible when he plainly is.
Week 9: Nothing heard AGAIN. I call AFPAA: my paperwork did arrive via fax, but "the girls didn't know what to do with it, so they filed it under 'unknown'."
Week 10: Bank of England raises the base rate and my bank decides I can no longer afford the mortgage. My Sgt is told he is eligible, but has to re-apply because his paperwork was lost. I lose my £500 deposit to the Estate Agency and have to cough up another £120 for my blood-sucking lawyer's fees.
Had AFPAA not been so completely incompetent I'd have been able to sign the mortgage papers in time and I'd be in a lovely new flat. As a consequence of their ineptitude my purchase fell through and I'm condemned to eating Pay as you Starve cr@p for another year. And I have yet to receive a reply to, or even an acknowledgement of, my letter of complaint.
If you're applying, ignore the 6-8-week lead-time you're advised of, and submit the paperwork months in advance. And pester AFPAA, because they really couldn't care less about you otherwise.
My process ran thus:
Day 1: I apply for LSAP. Unit sends paperwork via recorded delivery.
Week 6: Nothing heard. Estate agent getting bothered by lack of information.
Week 7: Still nothing. I phone AFPAA to be told that the paperwork never arrived, despite my Unit having proof of delivery. AFPAA say they'll rush it through if I fax the information to them. Meanwhile, my Sgt has been told he's not eligible when he plainly is.
Week 9: Nothing heard AGAIN. I call AFPAA: my paperwork did arrive via fax, but "the girls didn't know what to do with it, so they filed it under 'unknown'."
Week 10: Bank of England raises the base rate and my bank decides I can no longer afford the mortgage. My Sgt is told he is eligible, but has to re-apply because his paperwork was lost. I lose my £500 deposit to the Estate Agency and have to cough up another £120 for my blood-sucking lawyer's fees.
Had AFPAA not been so completely incompetent I'd have been able to sign the mortgage papers in time and I'd be in a lovely new flat. As a consequence of their ineptitude my purchase fell through and I'm condemned to eating Pay as you Starve cr@p for another year. And I have yet to receive a reply to, or even an acknowledgement of, my letter of complaint.
If you're applying, ignore the 6-8-week lead-time you're advised of, and submit the paperwork months in advance. And pester AFPAA, because they really couldn't care less about you otherwise.
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I am ex - Aircrew (12 months back) now a Financial Adviser and Mortgage Broker. I have completed a few mortgages now using LSAP and I would agree that the key to make sure it all goes smoothly is to be pro-active and never assume that people will just get on with what they are supposed to...'it doesn't work like that!'
I absolutely agree that you should apply early.
It is well worth applying for and this 'second charge' issue is really not a problem if you find someone experienced in this area. Don't be put off applying for it. It is not perfect but then again, what is?
BTW, when it comes to 'buying any property anywhere as long as you have your foot on the property ladder and rent it out meantime', I would say that in a rising market this is sound advice. However, take note that you do not have to have a Buy-to-Let mortgage to do this, their application fees and interest rates are generally higher than residential mortgages. Crucially, you will also need between 10 - 15% cash for a deposit, whereas with a residential mortgage you can get away with no deposit.(though it is better if you do have a deposit).
Because you are servicemen, there are residential lenders who make a special dispensation and will lend on a residential basis and will be happy for you to let the proerty out. (do not rely on asking counter staff on the high street - I had to go much higher up the chain to get a definitive answer). I have just completed a residential mortgage for an ATC bod who is off to Cyprus for 3 years and didn't want to risk being priced out the market on his return. The lender is happy for him to let it out.
If you are having problems, feel free to pm me.
I absolutely agree that you should apply early.
It is well worth applying for and this 'second charge' issue is really not a problem if you find someone experienced in this area. Don't be put off applying for it. It is not perfect but then again, what is?
BTW, when it comes to 'buying any property anywhere as long as you have your foot on the property ladder and rent it out meantime', I would say that in a rising market this is sound advice. However, take note that you do not have to have a Buy-to-Let mortgage to do this, their application fees and interest rates are generally higher than residential mortgages. Crucially, you will also need between 10 - 15% cash for a deposit, whereas with a residential mortgage you can get away with no deposit.(though it is better if you do have a deposit).
Because you are servicemen, there are residential lenders who make a special dispensation and will lend on a residential basis and will be happy for you to let the proerty out. (do not rely on asking counter staff on the high street - I had to go much higher up the chain to get a definitive answer). I have just completed a residential mortgage for an ATC bod who is off to Cyprus for 3 years and didn't want to risk being priced out the market on his return. The lender is happy for him to let it out.
If you are having problems, feel free to pm me.
